Attorney Mike Morse cleared of accident victim solicitation claims

May 11--Personal-injury attorney Mike Morse has been cleared of allegations that his law firm was involved in the improper solicitation of an accident victim, although he still faces a claim he took a "disproportionate" share of a client's no-fault insurance benefits.

A panel of the Attorney Discipline Board on Thursday agreed to drop three of the four counts of alleged misconduct filed against Morse last June in a complaint by the Michigan Attorney Grievance Commission.

The dismissed allegations relate to claims that Morse, as owner of the Southfield-based Mike Morse Law Firm, was involved in the hospital room solicitation of a car crash victim at Sinai-Grace Hospital in Detroit in November 2010.

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The panel of three attorneys accepted a stipulation filed last month by the Grievance Commission -- agreed to by Morse -- that all of the solicitation allegations be dropped.

Morse attended Thursday's hearing, held in a small conference room at a Bloomfield Hills law firm, but was not asked to personally address the allegations.

Robert Edick, deputy administrator with the Grievance Commission, declined to disclose the specific reasons why the commission opted to drop its solicitation claims.

Morse is one of Michigan's most visible plaintiff lawyers and bills his law firm as the largest personal-injury firm in the state.

"The commission still views solicitation as a serious issue, and we're always looking for instances where that can be pursued," Edick said. "But as a practical matter, you have to get the right case to do this."

Kenneth Mogill, an attorney representing Morse in the grievance case, declined to comment.

Known as ambulance chasing, solicitation is the illegal practice of approaching or cold-calling people who were just in a vehicle crash for commercial purposes, such as legal representation or medical treatment. Those caught soliciting within 30 days of the person's crash can face a misdemeanor charge and, for a repeat offense, possible jail time and a $60,000 fine.

The aggressive solicitation of accident victims in Detroit was highlighted this month in a three-day Free Press series on why auto insurance is so expensive in the city.

In his formal answer to the commission's solicitation claims, Morse denied all the allegations and said that starting in mid-2011, there was a significant change to his law firm's business model when it began advertising extensively on television.

As a result, "a large percentage" of clients now contact the Mike Morse Law Firm directly because of these TV ads, and "the situation allegedly giving rise to these counts does not occur, and there is virtually no risk of even a misunderstanding as to the manner in which a client came to retain the firm."

That change in business model followed a sharp reduction in auto accident case referrals that year to Morse's firm by the Sam Bernstein Law Firm.

The Grievance Commission is still pursuing Morse for taking what the commission calls an improperly large cut of the same accident victim's no-fault benefits during the six-month period when her auto insurer was voluntarily paying benefits and no lawsuit by Morse's firm had yet been filed.

During that time, the case was in Morse's "pre-suit department."

It's common practice in Michigan for accident attorneys to take a 33% cut of a client's benefits, as well as the client's medical providers' bills, as a contingency fee in settlements in lawsuits against an insurance company. The reasoning behind this practice is that without the attorney's services, none of those benefits or medical bills might have gotten paid.

However, the Grievance complaint claims that the size of Morse's 33% cut of the accident victim's in-home attendant care and 20% of her wage-loss benefits before any lawsuit was filed was "disproportionate to the nature and extent of the legal services provided" by his firm at that time.

Morse contends this contingency fee arrangement was legally permissible.

Edick told the Free Press that he suspects other law firms are taking a cut of their clients' no-fault benefits before lawsuits have been filed.

"Part of (Morse's) defense is this is something that is done in at least the other big plaintiffs firms," Edick said, adding, "Part of the difficulty is ... we can't just go in and point a finger and say, 'We think you're doing this. We want to investigate you.' So we, for the most part, are reacting to grievances that get filed."

A hearing on the still-pending disproportionate-fee allegation is scheduled for June 19.

If the fee is ultimately found as "illegal or clearly excessive," Morse would face a reprimand, the Attorney Discipline Board's least severe punishment, according to the stipulation agreement accepted on Thursday. Otherwise, this final claim against Morse would be dismissed -- like the solicitation claims -- without costs.

In the meantime, Morse agreed under the stipulation to pay a former caregiver of the accident victim an unspecified portion of his firm's pre-lawsuit fees that it took out of the insurance company's attendant-care payouts.

This payment is to be made "as a courtesy" to the caregiver and have no bearing on the Attorney Discipline Board's final decision on the appropriateness of the pre-suit fees.

The caregiver has said that she filed the complaint against Morse because "I had no contractual obligations for him to take a third of my money."

The now-dropped solicitation claims alleged that a nonlawyer private investigator who had a business relationship with Morse appeared in the doorway of the crash victim's hospital room with an unsigned Mike Morse Law retainer agreement.

The investigator allegedly told the woman he was there to offer information about the no-fault law at the request of one of the woman's coworkers. However, the injured woman said she never told any coworkers she wanted such information, according to the original grievance complaint.

Morse neither requested nor was aware of the investigator signing up the woman in the hospital room, according to his attorney's written response to the allegations.

Few attorneys in metro Detroit have been formally accused of soliciting clients or reprimanded.

Edick, the Grievance Commission deputy administrator, said he suspects that any attorneys who do get clients through the use of solicitation "aren't dumb enough to personally be approaching people."

Instead, they likely insulate themselves with layers of intermediaries who actually approach or call up the accident victims.

"Most solicitation takes place through intermediaries, so it then becomes very easy for the attorney to say, 'I had no idea that Bobby was doing that. We're going to write a letter in his file and we told him don't do that anymore,'" Edick said. "So it's the type of misconduct that's very hard to get a lot of traction on."

He added, "I wouldn't say they (lawyers) are immune. But if there's any suspected behavior in that regard, it makes it very hard from an investigative standpoint and a proof standpoint to demonstrate that there was some personal knowledge."

Contact JC Reindl: 313-222-6631 or [email protected]. Follow him on Twitter @JCReindl.

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